Main menu

Country analysis

The leaders, Ukraine and Moldova, are at about the same level of FSJ cooperation with the EU, although Moldova is apparently doing better where Approximation of FSJ is concerned, while Ukraine is doing better where Linkage of FSJ is concerned. Ukraine took the lead for a long time, while Moldova made steps to catch up and even moved ahead after its change of government in 2009. Meanwhile, Georgia has had more success in combating corruption and organized crime, where it outperforms the leaders. Armenia and Azerbaijan have a substantially shorter record of institutional FSJ cooperation with the EU and weaker political will. In the case of Belarus, obvious political limitations dominate.

FSJ cooperation between the EU and EaP countries is an issue of great importance, as it indicates the level of integration/cooperation in the most sensitive areas, which require a high degree of confidence between partners. FSJ cooperation is closely connected with the maturity of democratic institutions and rule of law. Increasing standards of FSJ cooperation may encourage countries to proceed with crucial reforms in combating corruption and organized crime, fighting illegal migration and human trafficking, and stimulate reforms aimed at better protection of human rights, more effective law enforcement and a transparent judiciary.

The specific carrot for FSJ cooperation with EaP countries is visa liberalization, which is expected to stimulate and guide important reforms aimed at making these countries safer for both their own citizens and foreign partners.

At the same time, FSJ cooperation can raise certain risks when it comes to relations with authoritarian and repressive regimes, as in the case of Belarusian human rights activist Ales Bialiatski. Belarusian authorities detained Bialiatski in August 2011 on charges of tax evasion as a result of information provided by the Lithuanian and Polish governments on a matter presented by Minsk as “combating money-laundering.” This case clearly demonstrates the way FSJ cooperation may be misused and even used against the purpose for which it has been designed. For Ukraine, which has witnessed cases of selective justice against opposition leaders, such aspects of FSJ cooperation as data exchange, extradition and other law enforcement cooperation also entail risks. Providing asylum for some opposition party members in the EU may be the first sign of growing challenges. Thus, FSJ cooperation cannot be assessed automatically with a quantitative approach, but rather, the actual capacity of a partner to cooperate on the basis of democracy, respect for human rights and rule of law should be considered.

As mentioned, Ukraine and Moldova are the leaders of the group. Ukraine launched institutional cooperation with the EU in FSJ back in 2002, when the first EU-Ukraine Action Plan on “Freedom, Security and Justice” was signed, and updated in 2007. In the case of Moldova, there was no separate document on the matter and structured cooperation was launched under the EU-Moldova ENP Action Plan signed in 2005.

Both Ukraine and Moldova have completed negotiations on the chapter on Justice, Liberty and Security in the framework of official talks on the Association Agreements that will replace their PCAs.

For a long time, especially after the Orange Revolution in late 2004, Ukraine was seen as a pioneer in FSJ. It was the first among EaP countries to sign the Visa Facilitation Agreement (VFA) and a Readmission Agreement in 2007. Then the process was synchronized with Moldova and the Western Balkans and all agreements entered into force as of January 2008.

Georgia signed such documents with the EU in June 2010 and they entered into force in March 2011, while the negotiations with Armenia and Azerbaijan were launched in February and March 2012 respectively.

The European Commission also received a mandate for VFA and readmission talks with Belarus. Despite almost frozen relations, the Council of Foreign Ministers stressed the importance of promoting people-to-people contacts between Belarus and the EU on January 31, 2011. At the same time, the EU imposed visa restrictions on some 200 Belarusian officials involved in political repression following the presidential elections in December 2010.

Ukraine unilaterally cancelled visa requirements for EU citizens in 2005, with Moldova and Georgia following suit several months later. Armenia and Azerbaijan maintain a symmetric visa policy approach. Azerbaijan even toughened its visa policies in 2011.

In October 2009, Ukraine was the first country to start an official Visa Dialogue, with the ultimate goal of establishing a visa-free travel regime. Moldova launched its dialogue in June 2010, while other EaP countries can do so after full implementation of VFAs and Readmission Agreements.

Ukraine signed its Action Plan on Visa Liberalization (APVL) in November 2010. Moldova did likewise in January 2011. The initial period of APVL implementation showed that this new instrument was an effective tool to mobilize both countries’ governments to proceed with important legislation, including ratification of CoE and UN conventions, in such areas as integrated border management, data protection, countering human trafficking and illegal migration, protecting refugees and asylum-seekers, and so on.

In Ukraine, 13 cooperation agreements on judicial cooperation and assistance with EU Member States are currently in effect, which is the largest number among EaP countries.

Currently, no EaP country has enforced operational agreements with Europol or Eurojust. Ukraine and Moldova have only signed framework agreements with Europol.

In border management, only Ukraine and Moldova have Working Arrangements with FRONTEX, as well as valuable practical cooperation with EUBAM, the EU Border Assistance Mission. Ukraine, Georgia, Moldova and Armenia have all implemented an integrated border

management concept in domestic legislation, while the first three have also put together the necessary Action Plans or implementation strategy. These three countries are obviously ahead of other three EaP partners in efforts to reform border security structures into a European-style border force.

Moldova can be considered the “laboratory” for new initiatives such as the Mobility Partnership, since 2008, and the Common Visa Application Centre, since 2007.10 Armenia was also offered a Mobility Partnership in 2011 as it signed a Joint Declaration with the EU. In 2011, Moldova became the first EaP country to stop issuing non-biometric passports to its citizens and is now issuing only biometric, ICAO-compliant passports.

Yet, Georgia is the more obvious success story in such key areas as combating corruption and organized crime. This fact has been confirmed by numerous independent studies, such as Transparency International’s Corruption Perception Index, which gave Georgia the best score, 3.8, among all EaP countries in 2010. By contrast, Ukraine and Azerbaijan were at the bottom, with 2.4, Belarus was marginally better at 2.5, Armenia similarly at 2.6, and Moldova a still-distant 2.9.11

Ukraine and Moldova, although frontrunners on most aspects of FSJ, are more often considered countries of origin for illegal migration to the EU than other EaP countries. The government of Moldova proved most willing to cooperate comprehensively with the EU in migration and asylum. Meanwhile, Belarus and Azerbaijan are source countries for asylum-seekers, but cooperation with them is limited for political reasons.

Ukraine is the most advanced where border management is concerned, while the relative success of Moldova is restricted by the Transnistrian conflict: 450 km of the country’s border is out of control of the central government. Georgia, Azerbaijan and Armenia have similar problems with frozen conflicts and hostile relations with some neighbors.

To sum up, Moldova and Ukraine are at about the same level of FSJ cooperation with the EU, with Moldova being somewhat in the lead. Ukraine’s success is due to the longer formal record of cooperation with the EU in this field, whereas the political will to reform is stronger in the case of Moldova. Georgia is also a success story in such key areas as combating corruption and organized crime, while Armenia has started catching up in 2011-12. The more modest success of Azerbaijan is due to a substantially shorter record of institutional FSJ cooperation with the EU, as well as to weaker European aspirations in this country. In the case of Belarus, political risks place serious limitations on existing opportunities.

Energy

Where energy is concerned, the EaP Index analyzes the extent to which the energy markets of EaP countries are integrated with and organized similarly to EU energy markets. Since the issues of energy sector and energy policy receive a lot of attention in EU policy towards EaP countries, the Index looks at energy market regulation and the market structures of EaP countries in terms of EU standards.

All EaP countries are engaged, to a greater or lesser extent, into multilateral platforms supported by the EU. However, only Azerbaijan as major oil and gas exporter in the region and Ukraine as a major transit country have signed EU sectoral agreements (Memoranda of Understanding). The structure of Georgian and Moldovan trade with the EU also relies on energy commodities, while Belarus focuses primarily on exporting fuels, minerals and refining products.

The situation looks drastically different, however, if the normative framework and market organization of EaP countries are taken into account. Formal commitments have less to do with the real implementation of acquis communautaire in the domestic legislation of EaP countries. Ukraine, despite being full member of the Energy Community, shows very low progress by having only prepared the ground for gas market reform. It has hardly implemented any other reforms or

requirements within its membership in the Energy Community. Ukraine’s heavy activity in implementing some energy efficiency incentives could be explained by its energy and CO2 intensity—the highest among EaP countries.

Moldova, also a member of the Energy Community, and, interestingly, Armenia, demonstrate better performance in implementing European reforms of the gas and electricity markets. The latter, despite having the weakest links to the EU in terms of energy, demonstrates relatively good progress in areas of environment and electricity, in setting and supporting RES targets, and even in solving grid connection issues which are problematic in other EaP countries. Georgia, an Energy Community observer like Armenia, shows partial compliance with the EU directives and regulations, while it pursues gas and electricity market liberalization and is close to full legal unbundling.

EaP countries have only begun to transform their energy sectors in accordance with EU regulations. Advanced reforms within the Third Energy Package and ambitious 20-20-20 targets, which aim at deep market restructuring and wide-scale infrastructure investments are not yet on the agenda. Independent regulators in Armenia and Moldova and free access to infrastructure in Georgia and partly Ukraine are the first steps that have already been taken in reshaping local markets in this direction.

Where such structural indicators as EaP countries’ energy consumption are concerned, the energy intensity of these countries is twice as high as the EU average and the RES share in primary energy consumption is still low, though increasing. GHG emission reduction targets remain high because national policies are less focused on production, which is heavily dependent on fossil fuels. This means that even having implemented EU standards, EaP countries will need to make painstaking efforts in order to bring their energy market structures closer to those existing in the EU. This process may take several years if not decades as the direction and pace of reforms are defined not only by political will, but also by economic, industrial and (geo)political factors that often act as intervening variables.

Transport

Modern transport policy should be aimed at making transport connections smoother, safer and more reliable for all transport users from the EU and EaP countries. So far, EaP countries have not demonstrated much success in pursuing the goal of deeper integration with the common transport spaces of the EU both in terms of infrastructure and regulatory environment. However, a closer look at some countries reveals some progress. Georgia and Moldova have already signed an Agreement on Common Aviation Area (CAA), and Azerbaijan began negotiations in 2011. At the same time, Ukraine, the first to start talks to join the CAA, is still far from achieving this goal. Nevertheless, these efforts by EaP countries show their intentions to ensure better quality and reasonable prices for aviation services for all users.

All EaP countries are located along transport axes between the EU and Russia and Asian countries. Consequently, they occupy a very advantageous transit position, in particular Ukraine, which is characterized by the largest number of international transport corridors, which are priorities for the EU’s transport system. However, transport companies from Belarus and Moldova have also managed to benefit from their location and obtain relatively high numbers of permits to enter the EU, compared to Ukraine. Caucasus countries do not have a common land border with the EU and are therefore disadvantaged in terms of integration with the EU’s land transport system. Nevertheless, they have made noticeable efforts in recent years to improve the quality of their transport infrastructure and customs procedures. As a result, being in more disadvantageous geographic conditions, they are now more advanced in logistic performance and infrastructure, which allows them to compete with Ukraine and Belarus, their larger EU-bordering neighbors.

In terms of regulatory environment, Armenia, Azerbaijan and Georgia rank higher. Ukraine comes in only forth and is likely to be surpassed by Moldova in the near future if the current pace of reforms continues. While Moldova has demonstrated some progress, reforms in Ukraine have almost stopped over the last two years. While Ukraine has allowed third parties to access port and airport infrastructure and unbundle different business activities there, it has not established an independent

transport regulator and has not significantly reduced the influence of the state, in particular in railways and roads. Belarus has the weakest regulatory environment by EU standards.

In terms of road safety, Georgia has shown the worst indicator, though this can be partly attributed to its complicated terrain. In general, all EaP countries demonstrate poor transport safety, which means all of them have to work hard to improve this aspect of their transport systems.

To sum up, all countries under consideration are at different progress levels in transport integration and harmonization with the EU. However, the efforts of Moldova and the Caucasus countries are noteworthy and it is expected that these countries will swiftly progress along the European pathway.

Environment and Sustainable Development

In this part of the Index, Moldova, Belarus and Georgia are the best performers, while Ukraine and Azerbaijan are the worst, mostly due to the high strain on their environments and poor environmental conditions.

We assessed performance in two major issue areas: 1) environment, climate change and sustainable development policy and 2) resource efficiency, impact on / state of the environment. In the first set of issues, Moldova shows the highest results. Ukraine comes in second, followed by Armenia and Georgia. Azerbaijan and Belarus close the list.

Moldova is leading in terms of policy, where environmental protection has a crosscutting nature and environmental policy integration (EPI), as demanded by the EU. Major international environmental conventions with compliance monitoring mechanisms assess Moldova as a country that complies with major requirements. Ukraine has showed some progress in terms of policy development and implementation. It recently adopted a new environmental policy consisting of a Law on State Environmental Strategy and the National Environmental Action Plan, where the EPI is a core. Ukraine is also leading among all EaP countries in terms of the number of Environmental Conventions and Protocols it has ratified. At the same time, Ukraine did not comply with the Aarhus and Espoo UN ECE Conventions or the Kyoto Protocol in 2011. Yet, after having implemented the recommendations of the Compliance Committee of the Kyoto Protocol, Ukraine was allowed to resume its participation in trade of greenhouse gas emissions quotas in March 2012. Armenia comes in third and is the only country among the six EaP countries that has ratified the Protocol on Strategic Environmental Assessment to the Espoo Convention, one of the main EPI instruments. Georgia, in fourth place, adopted the second generation of the National Environmental Action Plan in December 2012. Azerbaijan and Belarus lag behind in terms of environmental policy and legislation development.

In sustainable development policy, only Armenia has recently adopted the National Program on Sustainable Development. Notably, this was developed with the active participation of civil society. Also, Armenia has a functioning National Council on Sustainable Development (NCSD) under the President, where NGOs have a seat. Moldova went through a structured process including NGO involvement for the preparation of its own National SD Strategy (NSDS), but the Government did not adopt it, while other sectoral programs on sustainable development were adopted. The NCSD in Moldova was established with the participation of NGOs as well. Azerbaijan has a State Sustainable Development of Regions Program, while National SD Strategies have not yet been adopted in Georgia, Belarus or Ukraine. The latter has the SD principles and elements incorporated into its State Environmental Strategy. All countries, except Armenia, lack effective institutional provisions for the SD at the national level, though preparations for the Rio+20 Global Conference on Sustainable Development revitalized some activities on SD. Armenia, Ukraine and Moldova are all developing 10-year framework policies on Sustainable Consumption and Production.

In Sustainable Development and Trade, several indicators were considered. Ukraine ratified the largest number of International Labor Organization (ILO) conventions, 69, among EaP countries and 60 of them are already in force. Azerbaijan follows with 57 and 55 correspondingly, Belarus with 49 and 42, Moldova with 42 and 40, Armenia with 29 and 8, while Georgia has ratified and implemented 16. There has been little progress in imposing an EU-comparable mechanism for the prevention of illegal and unofficial fishery. Only Moldova adopted a relevant law, while Ukraine’s legislation meets

the standards only partially. Control of legal trade in forestry is slightly better, in particular in Armenia, Belarus and Ukraine, but the matter needs further investigation.

The analysis of the 12 indicators on resource efficiency, impact on the environment and state of the environment in this Index demonstrates that Belarus has the best environmental situation among EaP partners, followed by Georgia and Moldova. Ukraine has the worst situation. This result correlates with the recently-published Yale University Environmental Performance Index (EPI) covering 163 countries. In it, Ukraine ranks well below other EaP countries. Armenia and Azerbaijan have the worst water exploitation indexes (WEI), and Georgia and Armenia have performed poorly where water pollution is concerned. While Ukraine’s WEI is comparable with the EU-27 average, Armenia’s and Azerbaijan’s is double. Ukraine is a leader on SO2 pollution, showing approximately 3 times higher emissions than EU-27.

At the same time, the level of individual consumption of all EaP countries is not yet at EU-27 levels, confirmed by lower municipal waste production per capita. Where recycling is concerned, Belarus is recycling 12% and Ukraine 5-8%, while the others are not even at 1%, compared to over 22% in the EU-27.

The analysis demonstrated that, in terms of reducing greenhouse emissions compared to reduction potential, some countries actually increased their emissions in 2010—from 10% to 30%—, which could also indicate a need to re-define reduction potential. At the moment, Belarus is leading in the region with 51% and Moldova with 42%, compared to a 40% reduction by EU-27 in 2010.

Georgia has the highest pesticide input per hectare, almost twice exceeding the EU average, Moldova and Belarus correspond to EU practices, and Ukraine is the best, taking only 0,5-1 kg per hectare making least impact on the soil.

Meanwhile, the level of soil erosion is very high in EaP countries. All of the EaP countries exceed the EU-27 average. The worst situation is in Ukraine, where erosion is up to 57.5%, three times higher than in the EU-27. Armenia follows with 43.7%, Azerbaijan comes in at 36.4% and Georgia – 33%. At 26.0% and 19.3%, Moldova and Belarus look relatively better, although they still have a high share of eroded soil per territory.

In terms of forest area, only Belarus and Georgia exceed the EU-27 share. Ukraine has proportionally half as much forestland as the EU-27 average, while Armenia, Azerbaijan and Moldova all have only one third. A similar situation is observed with natural protected areas. None of the EaP countries came close to the EU-27 average indicator, with Azerbaijan being the best with 2/3 of EU areas, with Ukraine at 1/3, Moldova with 1/4 being the worst.

A general conclusion can be drawn that despite some success in policy elaboration and international cooperation, implementation of new strategies, plans and laws, all EaP countries lag behind when it comes to resource efficiency and the state of/impact on the environment. For the time being, Moldova is the most successful in its environmental policy effectiveness, while Belarus and Georgia follow. Ukraine is the biggest country in Europe by territory after Russia, with a long history of industrial and conventional agriculture within the former USSR. As such, it inherited heavy environmental consequences that are yet to be solved. This explains the largest gap among all EaP countries between modern environmental policy and the modest results of its implementation.

People-to-people

This part of the Index looks at the mobility of ordinary people, including students, at educational policies, focusing on the Bologna process, and at policies on culture, youth, the information society, media, and audio-visual use.

Where mobility is concerned, Moldova is far ahead of other countries, followed by Ukraine and Georgia, with the remaining three lagging significantly behind. Although Belarus receives the highest number of EU visas per capita and is close to the EU geographically, due to limited domestic opportunities for mobility such as legislation for student mobility and the availability of low-cost flights, it lags behind Georgia, a much more geographically distant country.

Participation in EU programs and agencies is open to all EaP countries that have Partnership and Cooperation Agreements with the EU, i.e., all but Belarus. Several EU programs are open to Belarus for participation as well. Participation in selected Programs and Agencies is defined by the European Commission according to the needs of each country and provided for in bilateral Protocols. A PCA Protocol has been signed by Ukraine and Moldova.

Moldova leads among EaP countries in terms of participation in EU programs and agencies. It is followed by Georgia, Armenia and only then Ukraine, Azerbaijan and Belarus. This is largely due to the fact that we mostly measured per capita participation in different programs. Where absolute figures are concerned, Ukraine, as the biggest country in the region, leads in participation in different programs.

With regard to the Bologna process and general education reforms, Georgia is the best performer. Georgia managed to make serious reform efforts back in the early 2000s and the situation now in many ways reflects what was done before. Belarus is lagging behind on the majority of indicators. This is due to the fact that education in this country is totally subordinated to the state at the central level, while reforms are mostly formal. Other countries, notably Ukraine, Moldova, Armenia and Azerbaijan, have so far preserved the soviet legacy with the state trying to control universities and at the same time attempting to implement Bologna principles. The situation regarding the autonomy of universities with regard to academic, institutional, personnel and financial components illustrates this rather vividly: the state controls universities in many respects, denies them the right to issue diplomas and grant qualifications and allows only limited institutional and academic freedoms. Ukraine remains the outsider where the new law on education is concerned, while other EaP countries have reformed education legislation. At the same time, Ukraine is doing better in terms of the National Qualifications Framework. No EaP country has made progress in providing opportunities for foreign students, including students from the EU. The majority of foreign students still come from neighboring former soviet-bloc countries and Central Asia.

Where culture, youth, information society, media, and audio-visual use are concerned, all EaP countries have more or less equal scores. More specifically, Ukraine, Moldova and Armenia are the most progressive in cultural policy, although Ukraine initiated reforms and monitoring through the Cultural Policy Review later than other EaP countries. Specific provisions are defined by the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions (2005) and the activities of the Council of Europe in this field, governed by the European Cultural Convention (1955) and participation in European cultural policy dialogue at the level of the Council of Europe.

Regarding youth policy, we looked at the national concept or legislation on youth policy, the national youth report, and at legal provisions for volunteering and for youth work. There were two different approaches in the region regarding national documents on youth: some countries use or amend old laws from the early 1990s, while others develop new legislation.

Apart from Belarus, all EaP countries are making progress in developing new strategies and laws, such as a law on volunteering. There are strong debates on the provision of youth work and informal education in Armenia. Until 2009, there were only fragmentary provisions for youth policy in Georgia, but the development of a National Youth Policy started in 2009 and the new law was already adopted and will come into force later in 2012. Georgia adopted its cultural legislation rather recently, but it is open to develop a new quality of youth policy. Moldova has no comprehensive youth report—only numerous fragmented studies on youth. There has been progress in preparing a new law on youth. Moldova also adopted a Law on Volunteering and at the moment is the only country that provides conditions for youth work according to an informal educational strategy. Ukraine has passed any number of amendments and also adopted a Law on volunteering, while Belarus has stuck to its old legislation.

Assistance

The Eastern Partnership countries are the recipients of Official Development Assistance (ODA) provided by the European Union. Despite the fact that the EaP countries are not traditional EU development partners, ODA constitutes an important linkage dimension, as it involves not only the transfer of financial resources, but also the exchange of experience and know-how as well as contacts between people.

In the EaP Index, we focused in particular on ODA delivered by the European Union itself (assistance delivered by the EU institutions, subsequently referred to as “EU”), including ENPI national and regional assistance, participation in thematic instruments and cooperation with European financial institutions. Nevertheless, to measure the real linkages between the EU and EaP countries in terms of assistance, we also examined the volume of aid delivered by Union Member States. In 2010, the volume of aid provided by the EU and EU-27 was almost equal—around EUR 400 million each—), totaling slightly above EUR 800 million.

Among EaP countries, European assistance plays evidently the biggest role in the cases of Moldova and Georgia. In these two countries, EU-27 and EU aid represents each 1-2% of GDP, whereas in the case of the remaining countries the assistance links with the EU are rather marginal. In the case of Ukraine, it stems from the size of the country and its GDP, in the case of Azerbaijan, Belarus and, to a lesser extent, Armenia, the limited level of assistance is a result of the political situation and evident lack of willingness toward European Union integration. This refers to both assistance provided by individual Member States and to EU aid.

The key assistance instrument used by the EU in relation to Eastern Partnership countries is the European Neighborhood Policy Instrument. For the years 2007-2011, the EU committed around EUR 1,5 billion to the EaP countries, with the biggest share—more than one third—planned as aid for Ukraine. The only country that will not benefit significantly from these funds is Belarus.

To measure the linkages between the EU and EaP in terms of transfer of experiences, know-how and contacts between people, we also studied the number of TAIEX projects aimed at providing targeted policy and legal advice, usually by sending an expert from an EU Member State to help a ministry or local government in a partner country with a specific reform task. In 2007-11, two countries, Ukraine and Moldova, each implemented more than 100 TAIEX projects, whereas in other countries, the scope of activities of this kind was much smaller. This somewhat mirrors the depth of engagement of these EaP countries’ institutions in approximating its legislation with the acquis communautaire. We also examined the number of Twinning projects focused on sending officials from EU Member State administrations to work together with their counterparts in the administration of a partner country. In this case, the projects implemented in Ukraine—40 over 2007-2011—were most numerous, although other countries, except for Belarus, also benefit from this scheme.

All countries except Azerbaijan are involved in ENPI East regional and interregional projects, in particular Ukraine, Moldova and Belarus, which are in closest proximity to the EU and share the longest land borders with EU Member States. Ukraine and Moldova also received additional EU support, on top of the EU funding amounts already allocated for those countries, from the so-called Governance Facility aimed at providing support to those partners who have made the most progress in implementing the agreed reform agenda set out in their Action Plan. Additionally, all countries, with the exception of Azerbaijan and Belarus, benefit from the Neighborhood Investment Facility. On the other hand, only Armenia and Moldova employ high-level EU advisors in their governments.

Regarding European financial institutions, we examined the loans offered by the European Investment Bank—EIB, one of the EU institutions—and the European Bank for Reconstruction and Development (EBRD), which is outside the EU institutional framework. While all EaP countries have recently benefited from loans offered by the EBRD, the EIB is actively involved in all countries with the exception of Azerbaijan and Belarus.

Management of European Integration

In the 2012 Index, unlike the previous one, we have relied on a more elaborate set of issues and questions to assess the management of European integration in EaP countries. We have studied institutional arrangements for European integration for coordination and implementation, legal approximation for institutional and policy aspects, management of EU assistance, professional development in the field of European integration for civil servants and in universities, and the participation of civil society.

Among EaP countries, management of European integration seems to reflect the level of priority placed on the EU in each country. Georgia, Moldova and Ukraine, those that have the greatest EU aspirations, are ahead of Armenia, Azerbaijan and Belarus that have weaker EU aspirations. Georgia and Moldova, the frontrunners, are approximately at the same level of performance, while Ukraine lags somewhat behind. Armenia and Azerbaijan are further behind and show similar results. Therefore, the EU is on the agenda in all six EaP countries, albeit to a lesser extent in Belarus.

Performance in different aspects of European integration management is uneven. Where institutional arrangements for European integration, that is, coordination and implementation are concerned, Moldova and Georgia are far ahead, and Armenia has caught up with Ukraine. This is largely so due to Ukraine’s poor performance compared to two or three years ago when the country had a relatively efficient coordination mechanism.

Although none of the EaP countries have established an EU coordination mechanism that is be comparable to the UKIE in Poland, in Georgia and Moldova, the official in charge of European integration is a deputy premier, which entails the power to coordinate the system. This is also the case in Ukraine, although this official has a very broad portfolio in which European integration is just one component. In Moldova, the Minister of Foreign Affairs and European Integration, who is also the deputy premier, is in charge. In Georgia, the relevant functions are performed by the State Minister for European and Euro-Atlantic Integration. This office is the main coordinating authority for EU affairs and serves as the secretariat of the European Integration Committee, the latter being a council of ministers that meets regularly. In Armenia, the Special Commission for EU Affairs is headed by the Chair of the National Security Council, who reports directly to the President and is completely in charge, but its powers are more advisory in nature. In Azerbaijan, much like in Ukraine, a deputy premier with a broad portfolio coordinates European integration.

Ukraine leads in terms of legal approximation, closely followed by Georgia. This is not to say that comprehensive approximation takes place in reality, but it reflects developed policy and procedural arrangements that were taken over from the previous government. In fact, this part of the Index looks at policy and procedures, while the impact of approximation is assessed in the Approximation dimension. Georgia probably has the most efficient system of legal approximation given that procedurally any bill or regulation submitted to the legislature has to be accompanied by an explanatory note that scrutinizes compliance with the EU acquis.

Ukraine is also leading in our assessment of training in the field of European integration, both for civil servants and at Universities. This has to do with the fact that Ukraine has a special state program for training in the field of European integration with limited budget allocations, and a National Academy of Public Administration that organizes courses. Other EaP countries mostly rely on international donor support, including TAIEX and twinning instruments of the EU. At the university level, there is no state support for this process, although European studies are slowly developing in all EaP countries. Overall, there is much room for improvement in all EaP countries in regards to the capacity building of civil servants that deal with the EU.

Management and coordination of EU assistance is less developed in Ukraine and Armenia than in other countries. Meanwhile, Moldova has a firm lead. Azerbaijan and Belarus are doing relatively well due to being strongly centralized with a strong vertical system and due to the fact that they receive much less funding than other countries, which in a way reduces the workload for them.

From our perspective, a criterion such as the political position of the National Coordinator for EU assistance is crucial because it consolidates the functions of strategizing national reforms and coordinating the instruments for their implementation. This directly affects the efficiency of EU assistance. In this respect, Moldova is the only EaP country where the Premier is the National Coordinator for EU assistance.

The assessment of EaP countries according to the criterion of a donor coordination mechanism again puts Moldova in the lead. In Moldova, the External Assistance Unit within the State Chancellery is in charge, while in other EaP countries the coordination of EU assistance is less clearly streamlined and sometimes is divided between different institutions or is in the hands of a ministry.

In this Index, we have also examined awareness-raising about European integration and found that activities aimed at making society better aware of the EU and the costs and benefits of European integration are not carried out in any of the EaP countries. If such activities take place, they are funded and implemented by donors and NGOs, while the governments of these countries place little importance on this issue.

Finally, we looked at the level of civil society involvement in European integration among EaP countries. We studied both civil society activities and their impact on decision-making concerning European integration. Moldova and Georgia are the frontrunners due to the fact that civil society in these countries has more chances to be included in the policy process. Ukrainian civil society, although active and vibrant, has enjoyed very limited access to the policy process in the past year.

Differences in the institutional framework that govern the relationship between the EaP coun­tries and the EU continue to influence the depth and intensity of political dialogue. In this regard, Ukraine has many advantages over the other EaP partners as it is the only country that holds an annual summit and has seven cooperation sub-committees. Although the annual EU-Ukraine summit did not take place in 2012 due to a number of political factors, being postponed to February 2013, Ukraine keeps its leading position concerning activities of bilateral institutions. In contrast, Belarus is the only EaP country that has no contractual framework with the EU, i.e. no Partnership and Cooperation Agreement (PCA) and, although it is a part of the Eastern Partner­ship Initiative, its bilateral relationship with the EU is frozen.

In 2012, Georgia, Ukraine and Moldova main­tained their leading positions relating to the density of high-level bilateral visits, while Azer­baijan and Belarus lag behind. For the first time, Armenia joined the frontrunners, thus suggesting an increasing interest of the EU in strengthening relations with Armenia and encouraging further domestic reforms.

Interestingly, Ukraine, Georgia and Belarus were the subject of the most statements released by the European External Action Service (EEAS), apparently due to the fact that all three countries had parliamentary elections in autumn 2012.

At the same time, political parties from all EaP countries have established cooperation with European political party families. It is notewor­thy that both ruling and opposition parties have established links with European party families. Three of the six heads of state and govern­ment — in Armenia, Georgia and Moldova — are affiliated with the European People’s Party. Remarkably, all three parties in the Moldovan governing coalition are associated with the three main European party families: People’s Party, the Socialists and the Liberals. The number of parties that are members of or observers in parties at the European level varies from five in Moldova to two in Azerbaijan.

As far as multilateral cooperation is concerned, all countries constantly participate in the work of the Eastern Partnership institutions. In contrast to the bilateral track, Belarus is fully involved in the multilateral dialogue within the EaP institu­tions, except for Euronest. The participation of Belarus in Euronest was indefinitely postponed for political reasons.

EU cooperation on human rights has various formats and is of varying intensity with indi­vidual EaP countries. Moldova, Georgia, Armenia and Belarus established dedicated human rights dialogues with the EU. However, the EU-Belarus dialogue took place only once, in 2009, and since then has been suspended. Moldova has two dedi­cated meetings with EU officials a year, whereas Georgia and Armenia one meeting a year. Ukraine and Azerbaijan refused to launch dedicated human rights dialogues. The EU is able to raise human rights concerns with these two countries only within the Justice, Freedom and Security (JFS) sub-committee.

Ukraine has preserved its leading position in cooperation in the Common Foreign and Security Policy (CFSP) and Common Security and Defence Policy (CSDP). Ukraine is the only EaP country that cooperates with both the EU Military Com­mittee and the EU Political and Security Commit­tee. At the same time, Moldova demonstrated a closer alignment with the EU foreign policy by subscribing to most of the EU CFSP statements and by signing the Framework Agreement on par­ticipation in EU crisis management operations. Ukraine is still the only EaP country that partici­pates in EU military missions. In 2012 Moldova and Georgia received a positive reaction from the EU regarding their potential participation in the EU EUCAP Nestor mission. At the same time, all EaP countries, except for Belarus, show an interest in strengthening security cooperation with the EU, by participating in different CSDP consultations and trainings.

This part of the Index looks at the mobility of citi­zens, including students, at educational policies, focusing on the Bologna process, and at policies on education, culture, youth and information society.

Moldova is the best at using the opportunities for mobility to the EU and ranks highest in people-to-people contacts. Ukraine follows second, while Georgia and Armenia stay closely behind in third and fourth position.

In 2012 the EU countries issued the highest number of Schengen visas, about 1.3 million, to Ukraine. The number of Ukrainians travelling to the EU has increased in the last year, as a result of the facilitated visa regime. Although the EU does not have a visa facilitation agreement with Belarus, Belarusians are the most frequent travel­lers to the EU. Every 13th Belarusian received a Schengen visa last year and travelled at least once to the EU. At the opposite end of the scale, Ar­menia has the lowest number of Schengen visas issued and only 1 for every 715 Armenians had a visa to travel to the EU last year.

According to the migrant stock data for 2012 almost 8% of Moldovan citizens are residing legally in EU countries. Belarus is next with 3% of its population having moved to the EU. Ukraine has the biggest diaspora in the EU with more than 1 million of its citizens, or 2.35% of the entire population, living in the EU. Azeris are the least attracted to move to the EU, with less than 35,000 choosing this path.

Participation in EU programmes and agencies is open to all EaP countries that have Partnership and Cooperation Agreements (PCA) with the EU. However, despite Belarus not having a PCA, the EU opened several programmes for Belarus’ participation as well. Eligibility for participation in selected programmes and agencies is defined by the European Commission according to the needs of each country and is provided for in bi­lateral protocols. PCA Protocols were signed with Ukraine, Moldova and Armenia. Azerbaijan and Georgia are still negotiating their protocols. All six EaP countries participate in the 7th Frame­work Programme for Research and Technological Development (FP7).

Georgia is the most active participant in EU pro­grammes and agencies among the EaP countries. Armenia, Ukraine and Moldova follow next more or less at the same level. Azerbaijan and Belarus are the most reluctant participants.

Georgia hosted the highest number of youth proj­ects, 36, in 2012, compared to only one project each in Belarus and Azerbaijan. Armenia has the highest number of participants in youth exchang­es per capita, while Ukraine the lowest. Georgia also hosted the most EU volunteers per capita, while Armenia sent the most volunteers to the EU. Armenian students are the best at taking ad­vantage of the EU funded scholarship programme Erasmus Mundus, while Azeri students are the least keen.

Although Ukraine has the highest number of uni­versities involved in EU funded Tempus projects, compared to the total number of universities, the country ranks the lowest in this category. Armenian, Georgian and Moldovan universities participate more often in Tempus projects. All six countries had a similar level of involvement, 10-11 projects per country, in bilateral and multilateral projects of the European Training Foundation.

When it comes to the Bologna process and general education reforms, Georgia is the best performer. The country managed to undertake se­rious reforms back in the early 2000s and the cur­rent situation in many ways reflects that change. Belarus is lagging behind on the majority of education indicators. This is due to the fact that education in Belarus is totally subordinated to the government, while reforms are mostly formal. Other countries, notably Ukraine, Moldova, Ar­menia and Azerbaijan, have so far preserved the soviet legacy of the government trying to control universities and at the same time are implement­ing Bologna principles. Moldova still debates the new Code on Education, which, once adopted, will bring together all the legal provisions on educa­ tion and replace the outdated law on education from 1995. In Ukraine the three-cycle system is rather a formality, since it coexists with the old two-cycle system and limits the potential for the mobility of students. The situation is similar in Armenia where MA programmes exist rather as a variation of the old specialist programme.

The situation regarding the autonomy of uni­versities with respect to academic, institutional, personnel and financial components shows that the government controls universities in many respects, denies them the right to issue diplomas and grant qualifications and allows only limited institutional and academic freedoms. Ukraine is the only EaP country that lacks modern legisla­tion on education. A new bill on Higher Educa­tion is currently being debated. At the same time, Ukraine is doing better in terms of the National Qualifications Framework. In April 2012 the Ministry of Education and Sciences of Ukraine approved the implementation plan for the Na­tional Qualification Framework for 2012-2015. In November 2012 a similar Regulation on Educa­tional Qualification was adopted in Armenia.

No EaP partner has made progress in providing better opportunities for foreign, including EU, students to study in the EaP countries. The ma­jority of foreign students still come from neigh­bouring post-soviet countries and Central Asia.

All EaP countries have similar scores assessing policies in culture, youth, information society, media and audio-visual use. More specifically, Ukraine, Moldova and Armenia are the most progressive in cultural policy, although Ukraine initiated reforms and monitoring through the Cultural Policy Review later than other EaP countries.

The youth policy scores take into account the existence of legislation, national youth reports and legal provisions for volunteering and youth work. All EaP countries are making progress in developing new strategies and laws, e.g. on volunteering. There are strong debates on the provision of youth work and informal education in Armenia. Until 2009, there were only frag­mentary provisions for youth policy in Georgia when the development of a National Youth Policy started. The new law was adopted and came into force in 2012.

Georgia adopted its legislation on cultural policy relatively recently and opened the debate on improving the youth policy. Moldova still has no comprehensive youth report — only numerous fragmented studies on youth. There has been progress though in preparing a new law on youth. Moldova and Ukraine adopted laws on volun­teering. Civil society in Belarus has advocated a number of amendments to the law on volunteer­ing, yet the authorities have so far been reluctant to improve the legislation.

Among the EaP countries, Moldova and Georgia are the main beneficiaries of and the most reliant on EU assistance. According to the latest available data funding from the EU and its member states to Moldova and Georgia accounts for about 3.8% and 2.5% of their GDP. Armenia took over the third position from Ukraine in the overall ranking of EU assistance. Belarus and Azerbaijan benefit very little from EU assistance. While the relatively low result of Ukraine is mainly determined by its large population size and high GDP, in the case of Azerbaijan and Belarus the low scores are a reflection of the EU’s ‘less for less’ approach according to which the EU offers little assistance to countries with little democracy.

The European Neighbourhood and Partnership Instrument (ENPI) is the EU’s main assistance instrument in relation to the EaP countries. In 2007-2010 the EU committed around EUR 1 billion to the EaP countries; this amount increased to over EUR 1.2 billion in 2011-2013. Ukraine is the largest beneficiary of the ENPI among the EaP countries receiving around EUR 470 million in 2011-2013. Yet, when ENPI assistance is calculated per capita, Ukraine is on the same level as Azerbaijan and Belarus, with only EUR 3.3 per capita allocated from the EU in 2012. In contrast, the EU allocation per capita to smaller countries is much higher: EUR 35 in Moldova, EUR 24 in Armenia and EUR 19 in Georgia per year.

In 2012, for the first time, the EU distributed funding from the Eastern Partnership Integration and Cooperation (EaPIC) programme. The new instrument worth EUR 130 million for 2012-2013 provides additional funding to EaP countries according to the principle of ‘more for more’ – the more a country progresses in its internal reforms for democracy, respect of human rights and the rule of law, the more support it can expect from the programme. According to EU assessment and supported by the findings of last year’s Index, three countries made good progress on deep and sustainable democracy last year and received additional financial support: Moldova (EUR 28 million), Georgia (EUR 22 million) and Armenia (EUR 15 million). Unfortunately the EU has done very little to publicise and to explain to the people in Ukraine, Azerbaijan and Belarus why their governments were not entitled to increased funding.

Moldova and Armenia were the only countries to continue benefitting from macro-economic assistance from the EU in 2012. While Moldova received a grant of EUR 30 million, Armenia received EUR 39 million as a loan from the EU. In February 2013 the EU committed EUR 610 million in macro-economic financial assistance to Ukraine. However, so far no funds have been disbursed as Ukraine did not meet the IMF requirements.

As a measure of linkage between the EU and EaP countries in terms of transfer of experiences, know-how and contacts between civil servants, the Index looks at the number of TAIEX and Twinning projects. TAIEX provides targeted policy and legal advice, usually by sending EU experts to help a ministry or local government in a partner country with a specific reform task or to provide short term training. The countries most eager to receive EU advice are Moldova (113 requests), Ukraine (100 requests) and Belarus (58 requests). Moldova and Ukraine hosted the largest number of TAIEX events in 2012, 39 and 37 accordingly. Surprisingly, Azerbaijan and Belarus hosted more TAIEX events than Georgia and Armenia. Ukraine and Belarus lead on the number of officials participating in TAIEX trainings.
Twinning projects are longer term peer-to-peer projects between public administrations of EU member states and EaP countries. Ukraine and Azerbaijan initiated three new twinning projects each in 2012. Georgia added two new projects and Moldova one. Additionally Armenia and Moldova host high-level EU advisors who help individual ministers and high ranking officials with sectoral reforms. In 2012 the EU delegated 15 high-level advisors to Moldova and 13 to Armenia.

All six EAP countries are entitled to funding within the Comprehensive Institution Building (CIB) initiative designed to strengthen the capacities of key institutions involved in preparing, negotiating and implementing the new Association Agreements with the EU. The EU support for CIB in 2012 varied from EUR 17 million for Moldova to EUR 7 million for Azerbaijan. Belarus is the only EaP country that did not receive CIB funds. Three countries — Ukraine, Moldova and Azerbaijan — received EU funds for regional and rural development in 2012.

All EaP countries, except Azerbaijan, are involved in ENPI East regional and interregional projects. Ukraine, Moldova and Belarus are the most active participants in cross-border projects taking advantage of their geographical proximity and shared land borders with EU member states.

In 2012 the Neighbourhood Investment Facility (NIF) contributed EUR 69.2 million to three regional and seven national projects in Eastern Europe. Armenia received the greatest funding from NIF, EUR 17 million, for two new infrastructure projects. Georgia is the second biggest beneficiary with EUR 12 million for two new projects. Belarus and Ukraine did not receive any new grants from NIF in 2012.
EU support to civil society in Eastern Europe increased considerably in 2012. EU funds to civil society organisations (CSOs) flow through the European Instrument for Democracy and Human Rights (EIDHR), the thematic programme Non-State Actors and Local Authorities (NSA&LA) and the Eastern Partnership Civil Society Facility (CSF). The CSF is the newest of the instruments and has a budget of EUR 23.3 million for 2012-2013. The CSF aims at strengthening civil society to become an agent of change and democratisation in the EaP countries. In 2012 the CSF focused on strengthening civil society’s networking capacity and improving their abilities to promote national reform and increase public accountability. Overall, the EU distributed more funding to CSOs in countries that are lagging behind in adopting EU standards or are notorious for restricting CSOs activities. Thus, in 2012 the EU provided EUR 5.5 million to Belarusian CSOs, EUR 5.2 million to Azeri CSOs, EUR 4 million to Ukrainian CSOs and only EUR 1.5 million to Moldovan CSOs. Moldova is the only country that did not receive any country allocation from the CSF, while Azerbaijan received the highest amount of EUR 3.6 million.
The Index also looks at cooperation between the EaP countries and European financial institutions — the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD). While all EaP countries have recently benefitted from loans offered by the EBRD, the EIB funded projects only in Ukraine, Moldova, Georgia and Armenia. Ukraine is the biggest beneficiary of loans from these institutions with accumulative figure of around EUR 1.6 billion for 39 projects. However, comparatively in terms of level of loans to GDP and population, smaller countries – Georgia, Moldova and Armenia – are leading in terms of benefits from the European financial institutions.

In assessing domestic economic performance and market economy status we focused on the qual­ity of the business climate in the countries and their transition progress. The analysis is based on widely used indicators for international economic comparison rather than country size, specific factors and short-term shocks. In particular, we used indices produced by the World Bank (Doing Business), EBRD (Transition Reports), World Eco­nomic Forum and the Heritage Foundation.

A number of conclusions can be drawn from the analysis. According to the World Bank Doing Business (DB) 2013, Georgia has preserved its leading position in the category ease of doing business among the EaP countries. Armenia holds the second place. Despite significant prog­ress in starting-up businesses and paying taxes, Ukraine still has the least attractive business climate in the group. In general, five out of the six EaP countries im­proved their performance compared to the results in the DB 2012. A reduction was registered only in Azerbaijan. Armenia and Ukraine were the front-runners in terms of positive changes.

Four of the six EaP countries — Armenia, Azer­baijan, Belarus and Georgia — ensure that busi­nesses can be established quickly, both in terms of time and monetary costs, thus allowing free entry to the market. Ukraine has also achieved significant progress in freeing market entrance thanks to reductions in the time, cost and num­ber of associated procedures required. Neverthe­less, the country is still lagging far behind the group average, especially when it comes to the duration of registration procedures.

At the same time, all countries have set up ob­stacles for resolving insolvency, thus preventing free market exit, which is another basic principle of the market economy. Armenia and Belarus are the leaders in ease of resolving insolvency, while Ukraine has the worst ranking due to high associ­ated costs and low recovery rate. The situation considerably deteriorated in two markets — Be­larus and Georgia.

Paying taxes remained quite cumbersome in all EaP countries, except for Georgia that features a low tax rate and a system of only five payments per year. Four out of six EaP countries demon­strated significant progress in the simplification of tax payments, while the situation in Azerbai­jan improved only slightly and Belarus regressed. Ukraine is still the worst performer in the group.

The EaP countries have a moderate standing in contract enforcement, with the exception of Ar­menia whose performance worsened in compari­son with the DB 2012 as the country increased delays. Belarus holds the leading position in ease of contract enforcement according to DB 2013 with the lowest number of procedures. According to Heritage Foundation assessments, enforce­ment of property rights has remained quite weak in all the EaP countries and corruption constitutes a serious challenge for the economic development of the region.

The EBRD country transition indicators show that five out of six EaP countries, with Belarus remaining the exception, have achieved com­prehensive price and trade liberalisation and completed the privatisation of small companies with tradable ownership rights. The progress in large scale privatisation is not uniform across the EaP countries. The most significant prog­ress in large-scale privatisation and corporate governance is registered in Georgia and Armenia, while Azerbaijan and Belarus preserved state ownership for a considerable part of the economy and the process of large privatisation is just at the beginning. All EaP countries feature little progress in governance and enterprise restructur­ing and in competition policy reform. According to the World Economic Forum the effectiveness of promotion of competition policy in the EaP countries is quite moderate.

There is very little change in the EBRD sec­tor transition indicators of the EaP countries compared to last year’s Index. All EaP countries have room for improvement in market structure and market-supporting institutions and poli­cies in the majority of sectors. Armenia, Georgia, Ukraine and Moldova have a relatively more developed market structure, while Belarus and Azerbaijan are lagging behind. Across sectors, the corporate sector and selected sectors in infra­structure have been developed the most. At the same time, further regulatory efforts should be devoted to the development of the financial and energy sectors.

There seems to be no direct link between trade turnover between the EU and each of the EaP countries, on the one hand, and business climate, on the other. For instance, Ukraine has the most intensive trade with the EU and is the largest recipient of FDI from the EU, partly determined by the size of the country, and yet its business climate is the worst among the EaP countries. However, once the business climate improves, it further boosts investments and trade between the parties.

Towards DCFTA

Deep and Comprehensive Free Trade Agreement (DCFTA) along with the prospect of visa-free travel are the two biggest incentives that the EU offers to its partner countries within the Eastern Partnership Initiative. DCFTA is the most com­prehensive free trade arrangement that the EU has so far offered to any third country, which will have profound implications for domestic reforms in EaP countries.

The DCFTA part of the Index looks at all the sectors that are relevant to the free trade area and that are included as chapters in the Associa­tion Agreements (AA) between the EU and EaP countries. The AA with Ukraine is now technically ready for signing and the text is published. At the same time the EU concluded negotiations with Moldova, Georgia and Armenia. The EU cannot start DCFTA negotiations with Azerbaijan before the country’s accession to WTO, while DCFTA is not at the moment in sight for Belarus.

The six EaP countries can be divided into three pairs according to their DCFT performance. Georgia and Moldova are the best performers, as they demonstrate the highest level of compli­ance with DCFTA requirements and both made progress compared to last year. This is despite the fact that both countries started DCFTA negotia­tions much later than Ukraine and concluded the negotiations faster. Ukraine and Armenia are on the same level, but below the frontrunners. The difference is that Ukraine’s performance deterio­rated, while that of Armenia improved. Azerbai­jan and Belarus lag behind and find themselves almost on the same level. The fact that Belarus and Azerbaijan are on the same level is interest­ing since Belarus is a member of the Customs Union of Belarus, the Russian Federation and Kazakhstan and therefore cannot have a free trade area with the EU independently from the Customs Union. This might mean that trade with the EU is still attractive for Belarus and a lim­ited level of regulatory adjustment is needed in order to increase trade flows. However, in 2012 both countries slowed down in meeting DCFTA requirements.

Liberalisation of trade policy is one of the key DCFTA requirements. Moldova, Ukraine and Armenia pursue the most liberal trade policies. Georgia made significant progress in 2012 and is catching up with the frontrunners. Azerbaijan has the most protectionist trade policy.

Ukraine’s sanitary and phito-sanitary standards are the most compatible from the region with DCFTA requirements. It is the only country that made progress in 2012 leaving the other coun­tries far behind.

All six countries score rather highly when it comes to customs and trade facilitation provi­sions and there is no change compared to last year.

Regulations for services and establishments are also rather developed in all six countries with Be­larus lagging behind. Armenia made the biggest improvement, while Azerbaijan’s performance worsened.

Capital provisions are the most developed in Moldova, Georgia and Armenia. Ukraine demon­strates a mixed pattern — halfway between good conditions for the free movement of capital and too much state regulation. For instance, there are restrictions on the acquisition of agricultural land by foreigners and administrative procedures that limit the free movement of capital. In Belarus and Azerbaijan capital market is too heavily con­trolled by the state. Four countries — Moldova, Armenia, Georgia and Azerbaijan – fully meet EU intellectual prop­erty rights requirements. Ukraine and Belarus lag behind as countries that offer low protection in the United States Trade Representative (USTR) watch list.

Georgia is the only country in the region that meets EU geographical indications requirements. Moldova’s performance is also relatively high, while the other four countries lag far behind at approximately the same level.

Competition and state aid requirements are fully met only in Georgia. The gap among the coun­tries in this area is large. Moldova comes second, followed by Ukraine and Armenia. Belarus and Azerbaijan are far from meeting EU requirements in this area. Moldova and Armenia both made significant progress compared to last year.

All these differences no doubt reflect the level of political will in each country to meet EU require­ments. However, one should also take the differ­ences in structures of domestic economies into account. The large production sector in Ukraine naturally advocates for more protectionist measures and the costs of adjustment in Ukraine might be higher than in Georgia, Moldova and Armenia, at least from the perspective of strong interest groups.

The scores on Management of European Integra­tion explain how EaP countries ‘manage’ and or­ganise both their links with the EU and approxi­mation to the EU. Thus the Index looks at the institutional framework for European integration, mechanisms of policy coordination and imple­mentation, legal and institutional approxima­tion, management of EU assistance, professional development in the field of European integration available to civil servants and to students at uni­versities, and the participation of civil society.

The chosen approach to Management of Euro­pean Integration seems to reflect the importance attached by each EaP country to its relations with the EU. In this respect we can clearly identify two groups of countries: the first group – Georgia, Moldova Ukraine and Armenia – have a rather de­veloped system of management; and the second group – Azerbaijan and Belarus – invest fewer efforts in developing closer links and approxima­tion with the EU. Georgia and Moldova have the most sophisticated system of management, while Ukraine and Armenia lag somewhat behind. In terms of trends as compared to last year’s Index, we do not see any significant changes in any of the countries apart from Armenia, who clearly made progress. The 2013 Index also registers a rather slight improvement in Moldova and Be­larus and insignificant decline in Azerbaijan.

Performance with respect to different aspects of Management is uneven. When it comes to insti­tutional arrangements for European integration, in particular policy coordination and implemen­tation, Moldova remains the leader followed by Georgia. Moldova is the only country in the region that not only has a European Integration Strategy, which helps to streamline reforms in line with objectives agreed bilaterally with the EU, but also committed budgetary resources for strategy implementation. Although none of the EaP countries has established an EU coordination mechanism that is comparable to that applied by the new member states before EU accession, e.g. UKIE in Poland, in Georgia the Office of State Minister on European and Euro-Atlantic Integra­tion, at least where its powers are concerned, can be seen as an efficient model. This office serves as the Secretariat of European Integration Commis­sion, chaired by the Prime Minister. In Moldova, the Minister of Foreign Affairs and European Integration is in charge of EU issues, but key decisions concerning European integration are considered at the level of the Governmental Committee for European Integration, similar to the one in Georgia. Both in Georgia and Moldova the official in charge of European integration oc­cupies the position of the Deputy Prime Minister with respective powers of coordination.

Armenia progressed even further in Manage­ment during the past year than in 2011. Experts reported better ability of the government to implement decisions and agreements reached in the field of European integration. Moreover, Armenia’s sectoral policies became more con­sistent with EU requirements. Two collegiate bodies dealing with European integration exist in Armenia: the Inter-agency Commission chaired by the Secretary of the National Security Council, established back in 2008, which is responsible for cooperation with European structures and surveying the implementation of the ENP Action Plan, and the more recent Inter-agency Commis­sion chaired by the Prime Minister, responsible for coordination of cooperation between Armenia and the European Union.

Ukraine continues to lag behind, since it has no European Integration Strategy and the objectives defined jointly with the EU within the Associa­tion Agenda are barely followed through at the domestic level. Moreover, the country lacks a co­ordination mechanism for European integration, a structure that was in place up until 2010. The situation became even less clear since December 2012 when no deputy prime minister in charge of European integration was appointed in the new government. Instead, the Prime Minister Mykola Azarov stated that he was personally in charge of coordinating the European integration efforts. Additionally, the chairman of the Na­tional Security and Defence Council was assigned competences to deal with European integration without any powers over the government and individual ministries. In February 2013 the head of the Ukrainian Mission in Brussels acquired ad­ditional ‘integration’ functions, being appointed as a special envoy on integration. These overlap­ping competences with no added value have no positive implications for streamlining the reform process in line with the EU requirements. The Ukrainian side of the EU-Ukraine Cooperation Committee — what used to be a collegiate body responsible for European integration — is no longer functional given that it has not convened for a very long time.

In Azerbaijan there is a collegiate body – the State European Commission, chaired by the Minister of Economic Development since December 2012. The Commission includes 34 representatives from different ministries. Yet, it is not clear whether the Commission meets regularly and whether it exercises de-facto coordination functions.

Ukraine has the most elaborated system for legal approximation, closely followed by Georgia and Moldova. This is not to say that comprehensive approximation takes place in reality in Ukraine, but it takes into account policies and procedural arrangements that were introduced in Ukraine before 2010.

This part of the Index looks at policy and procedures, while the impact of approxima­tion is assessed in the Approximation dimension of the Index.

Georgia probably has the most efficient system of legal approximation given that procedurally any bill or regulation submitted to the legislature has to be accompanied by an ex­planatory note that scrutinises compliance with the EU acquis.

No significant changes in legal ap­proximation occurred in any of the EaP countries compared to last year’s Index.

Ukraine lost its leading position when it comes to training in the field of European integration, both for civil servants and at the university level. Ukraine’s score did not change, but Armenia made significant progress and overtook Ukraine to now be the leader among EaP countries.

Geor­gia lags significantly behind, leaving Moldova and Azerbaijan, both at the same level, even further behind. Armenia’s progress has to do with the fact that there are now various training pro­grammes for civil servants, mostly funded by the EU, while last year this was not the case.

More­over, Armenia is the only country in the region that allocates state funding for European Studies at university-level. However, this practice is so far limited to only one university, i.e. the State Science Committee of the Ministry of Educa­tion and Science provides annual grants to the Centre for European Studies at the Yereven State University. Ukraine still scores highly, since it has a special state programme for training in the field of European integration with limited budget allocations. This programme is implemented by the School of Senior Civil Service and National Academy of Public Administration, which reports to the Office of the President of Ukraine. Other EaP countries (especially Moldova and Arme­nia) rely mostly on international donor support, including TAIEX and twinning instruments of the EU. Unfortunately none of the EaP countries has introduced a mechanism for assessing the effectiveness of training programmes for govern­ment officials in the field of European integration, indicating a lack of data on the effectiveness of training and the use of resources (both national and international).

Only two EaP countries — Georgia and Armenia — assess training needs of public servants in the area of European integra­tion and publish relevant reports.

Overall, there is much room for improvement in all EaP countries when it comes to the capacity building of civil servants at central and local level who deal with the EU and increasing the effec­tiveness of respective training programmes.

This dimension of the Index also looks at aware­ness-raising about European integration. Simi­larly to last year’s Index, the current report shows limited awareness-raising activities in all EaP countries. Most activities are funded and imple­mented by foreign donors and NGOs, while the governments of these countries place little im portance on this issue. All EaP countries are more or less at the same level. Armenia and Georgia show better results than Ukraine and Moldova. Azerbaijan and Belarus are again the underdogs.

There might be improvements in the next Index if some of the efforts currently underway deliver. In March 2013 the Ukrainian government adopted a concept of awareness-raising for the period until 2017. It should however be followed up by an action plan and budget allocations. Similarly, in Georgia the process of consultations with civil society to elaborate an awareness-raising strategy started in 2013. It should be noted that special EU information centers were established in all EaP countries, except in Azerbaijan, but those are funded entirely by donor organisations. Georgia again provides a good example, where public funds are used to fund the NATO and EU Information Centre.

Finally, the Index looks at the level of civil society involvement in the Management of European Integration. It looks at both civil society activities and their impact on decision-making. Moldova and Georgia are the frontrunners due to the fact that civil society organisations in these countries have more opportunities to be included in the policy process, using institutionalised forms of public consultations with governmental officials – the National Participation Council in Moldova and the Public Advisory Body under the State Minister on European Integration in Geor­gia. NGOs in all EaP countries produce regular reports and assess government performance and progress on European integration.